By Wendy Greenberg
While this year’s Princeton Public Schools (PPS) budget may result in some increases in taxes, it is the ensuing years that may be of more concern, said Superintendent Mike LaSusa in his presentation to the Board of Education last Tuesday night, March 17.
With close to a $743,000 budget gap facing PPS, residents might see property taxes increased as a result of the 2026-2027 budget. The Board of Education must adopt a final budget by April 28, when there is a budget hearing and Board meeting at 7 p.m. at 25 Valley Road.
LaSusa’s comprehensive budget presentation during the March meeting shows approximately $116 million in projected expenditures, with a maximum revenue ceiling of roughly $115 million.
But, he said during the presentation, “In composing the budget, the Board and the administration has tried to ensure we are not altering or dismantling or reducing any of the current programs that our students enjoy.”
Most increases come from salary and benefits, including health benefits. Some new expenses include a sewer charge and charter school tuition increases. On the revenue side, funds from the PILOT (Payment in Lieu of Taxes) agreements with the municipality will add to the revenue, as will a state aid increase, but leaving a $743,000 gap.
Princeton is not alone. LaSusa noted that there are “districts all over the state of New Jersey that are experiencing financial difficulties.”
The superintendent noted that while this year may not see cuts to student programs, it could take a toll in the future, when “expenses are going to continue to be greater than our revenue.”
He said that if nothing changes, if the current school tax levy cap remains in effect, which effectively caps the vast majority of district revenue at 2 percent, and if other expenses continue to rise well in excess of 2 percent, “then future years will become even more challenging.”
The question, he said, during the presentation, “is really going to become, for the Board, and the community at large, ‘Do we reduce the programming to get in line with the revenue we have, or do we increase the revenue to try to match the programming that people are accustomed to?’ That is a much more involved conversation, it will take time. Right now I can say we can accomplish a budget by April 28 that does not have significant cuts to students, but it’s likely that next year or the year after that will not be the case.”
He said for this year, the Board is discussing “attrition, reorganization, reducing memberships, subscriptions, and tech service.” The Board will identify new revenue streams, possibly activity fees.
Suburban districts like Princeton, said LaSusa, “rely heavily on the local tax levy.” He said that “for the past 15 years we have operated on a very, very tight 2 percent levy cap.” There are some exceptions where a school district can go over the cap, including not using its full taxing authority in a prior year (PPS has $13,600 available here); and pension growth, an enrollment increase, and health insurance benefit premium increases, which are determined by the state.
“We’re living in two worlds right now that are contradictory,” LaSusa said of the state’s school funding formula, School Funding Reform Act (SFRA), enacted in 2008 based on district needs and local fiscal capacity, and the 2 percent cap. “SFRA is intended to let school districts fund as much of their budgets as they want, and then there’s a 2 percent levy cap that has the exact opposite effect.,” said LaSusa.
The PPS budget faces its biggest challenge from health insurance costs, where those expenses are expected to increase from $15.5 million this year to nearly $17.8 million next year.
Also in his presentation, LaSusa noted that, in recent weeks, the Municipality of Princeton told the district it had not billed schools for water management services, leading to an unexpected $100,000 expense. Additionally, charter school tuition rose $320,000 more than expected, with unexpected placements totaling $5,000 — a total of $525,000.
This gap could result in an almost $56 more annually per $100,000 of assessed property value, according to PPS, which could result in a $280 increase for a home valued at $500,000 and a $560 increase for a home valued at $1 million, which are estimates from the district business office.
The Board adopted the preliminary budget on Tuesday and it will be sent to Mercer County for review.
Also at the March 17 meeting, the Board voted to approve some calendar changes: May 22 will be an early dismissal day for students and May 26 will be a regular day — to make up for days off for inclement weather to maintain a state-mandated 180-day calendar.